December 1, 2008
Asia Grain Outlook on Monday: Thai rice export prices to remain supported
Thai export rice prices are likely to remain well-supported over the next few weeks, as the government continues its intervention program.
Traders said the Thai government is buying paddy from farmers at THB12,000 a metric tonne, which has ensured private millers have to shell out a higher price if they want to buy paddy from the new crop, currently being harvested.
The government plans to buy 8 million tonnes of paddy in the intervention program which ends in February.
Meantime, the demand for white rice continues to be sluggish.
"Vietnam is selling white rice at much lower prices than Thailand; as a result, the offtake of Thai white rice exports has been hit," said Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand.
However, Thai rice exporters said the current political problems in Thailand haven't affected exports.
But any blockade in Thai seaports, similar to the recent airport shutdown, could "be a major problem for exporters," said Chookiat.
Another Thai rice exporter, however, said even if activities at the Bangkok port were to be hit by political protests, exporters could simply ship more rice from Laem Chabong port, 130 kilometers away from Bangkok.
Currently, Thai 100% grade B white rice is being quoted at US$560/tonne, free on board Bangkok.
In other related news, India is slowly opening up its non-basmati rice exports, which have been banned since March.
Last Friday, the state-owned State Trading Corporation said it will export 55,000 tonnes of rice to four African countries under inter-government deals by mid-January.
The first deal is likely to a shipment of 15,000 tonnes of non-basmati rice to Ghana by mid-December, at US$500/tonne, on a cost-and-freight basis.